Daydream Systems Pty Ltd has five directors: Kaitlin, Rufus, Willie, Jamie and Zak. Jamie

and Zak are working directors. They oversee the daily operations of Daydream Systems Pty

Ltd. The company is engaged in all aspects of IT and networking. The company helps

businesses of all sizes transform how people connect, communicate, and collaborate

Willie is a CPA and assists in preparing the monthly financial reports for all the directors.

Kaitlin is a university graduate and holds a Master of Commerce degree. She is well versed

in the IT and networking industry and how it works.

Rufus is Zak's brother and has had a history of mental health problems and suffers from

post-traumatic stress disorder from an accident he suffered when he was a teenager. Zak

supported Rufus's wish to become a board member even though he really didn't have

experience. Zak thought that it would help Rufus gain more confidence by giving him an

important role in the company.

Daydream Systems Pty Ltd had a record year in 2020. The company signed many new

contracts with some big corporate clients. The directors met in July and decided to pay a

dividend of $0.20 per share.

However, when the COVID-19 pandemic impacted businesses all over the world, the

company underwent a severe decline in new contracts from the middle of 2020 until the

present. This has placed the company in financial difficulties. Jamie and Zak have been

with the company since its inception and they are loyal supporters of Daydream Systems.

The company is their life.

Rufus has never bothered to read any financial statements that were sent to him. He never

checked the company's financial returns for any of the years before he was appointed and

he has never read any reports since he was appointed.

Shareholders of DaydreaSystems Pty Ltd number 21 and include the directors and

members of the founding family who have held onto their shares but are not really

interested in the company.

Kaitlin's brother Brendan has a computer security company, Sphinxecurity Pty Ltd, and

Kaitlin attends its Board meetings and gives advice. Because of her education and

experience, the Board of Sphinxecurity Pty Ltd follows her advice. Recently, Daydream

Systems Pty Ltd contracted with Sphinxecurity Pty Ltd. Katilin persuaded the rest of the

directors of Daydream Systems Pty Ltd to sign this contract. She was also the one who had

gathered all the quotes for this job and they all exceeded the Sphinxecurity Pty Ltd quote.

This was because Sphinxecurity Pty Ltd had put in a quote below the cost price of the work

because Kaitlin assured the company that they would get more jobs from Daydream

Systems Pty Ltd in the coming years.

Willie attended a Board meeting some months ago and wanted to propose a genius idea.

His idea was for Daydream Systems Pty Ltd to become involved in developing applications

for home and office security systems that could be used on any device.

The other Board members were not so convinced; but as Willie a CPA, he naturally

produced some astonishing figures based on information from the company's files. The

board voted against the proposal after Kaitlin, with her Master in Commerce knowledge ,

argued the company should focus on its core business of IT and networking

Willie is disappointed but yesterday signed a deal with another IT and networking company

known as Leopardtechs Pty Ltd. The deal involve Willie being paid a hefty bonus for every

successful app he and his team developed

Daydream Systems Pty Ltd is now encountering financial trouble. However, the directors

continue allowing the company to trade without thinking what would happen if they run out

of credit with their banks.

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Have the directors of Daydream Systems Pty Ltd violated their directors' duties (1000 words